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Galleria Opening Puts Pressure on the Competition

August 25, 1985|DEAN MURPHY | Times Staff Writer

Two years ago, when Redondo Beach officials approved plans to convert the decaying South Bay Center into a $70-million regional shopping mall, officials two miles down the road at the Del Amo Fashion Center predicted disaster for other malls on or near Hawthorne Boulevard, the South Bay's major commercial strip.

The Torrance Co., owner of the Del Amo Fashion Center, the largest mall in Los Angeles County, filed suit to block the renovation, arguing that the expansion would create insurmountable traffic problems and would compel shoppers to avoid Hawthorne Boulevard.

The suit was eventually thrown out of court when a Los Angeles Superior Court judge ruled that the Torrance Co. was more interested in stifling competition than in keeping local roads free of traffic. Said Redondo Beach City Manager Tim Casey at the time: "I don't think anyone believes (the Torrance Co.'s) concerns are limited to traffic flow."

Economic Repercussions

This weekend, as the renovated South Bay Center readies for its official rebirth on Monday as the decidedly highbrow Galleria at South Bay, concerns remain on Hawthorne Boulevard and beyond about the economic repercussions from another major shopping mall.

The new mall features a Nordstrom department store, part of a Seattle-based chain that prides itself on good service and stylish, contemporary fashions at upscale prices. With it have come exclusive retailers such as Laura Ashley, Abercrombie & Fitch and Old River, a French clothing store for men. The mall will offer valet parking, a three-level waterfall--even a boutique with computerized shopping services for women.

"It is a quality project," acknowledged James Jones, president of the Torrance Co. "It will divert sales from other projects in the South Bay area."

Anchor Stores Doing Well

Dan Reed, general manager of the Carson Mall, estimates that his mall has already lost about 5% of its business since the Nordstrom store opened in March. Although the Galleria will celebrate its grand opening this week, its anchor department stores--May Co., Nordstrom and Mervyn's--are already open and doing very well, according to the developers.

Representatives from other South Bay malls said they are preparing for a drop in sales--most expect it will be only temporary--during the next few weeks. "A lot of people will be curious about the mall and will go down there and take a look at it," said Charles Davis, general manager of the Hawthorne Plaza, located several miles north of the Galleria on Hawthorne Boulevard.

Based on brisk sales at the three anchor department stores, Redondo Beach city officials are already raising projections about how much tax revenue the city can expect from the Galleria during its first year. Sales tax information from individual stores is proprietary, but Casey said last week that the city's share of sales taxes from the Galleria--including the May Co., which has remained open throughout the center's transformation--will exceed $1 million.

"The market studies suggest there is a growing market share in the South Bay area of increasing affluence," Casey said. "We believe it is going to do even better than we originally projected."

Sarah Callandar, director of international publicity for Laura Ashley, an exclusive clothing store based in Great Britain with area outlets in Beverly Hills, Century City and Costa Mesa, said the company conducted exhaustive marketing studies before choosing to locate at the Galleria.

"The mall itself is being filled with like-minded retailers, meaning those who cater to somewhat upscale customers," Callandar said. "We look at income and the number of people supporting the area. We appeal to the customer who likes quality and good design at a very reasonable cost."

Good Demographics

Similarly, Tom Blakeley, regional manager for Abercrombie & Fitch, which caters to the affluent leisure sportsman, said the company selected the Galleria because of the demographics and the merchant mix.

"We can definitely serve the needs of the upscale customer in that area," Blakeley said. "Nordstrom's success in the mall was somewhat attractive to us, too." Abercrombie & Fitch has area stores at Beverly Center and South Coast Plaza.

The Galleria, including Nordstrom and Mervyn's, added about 600,000 square feet of retail space to an existing 350,000-square-foot May Co., the only building from the former South Bay Center to be incorporated into the Galleria design. The other major regional shopping malls in the South Bay--Del Amo Fashion Center, Hawthorne Plaza, Manhattan Village, Carson Mall, Peninsula Center and the Courtyard Mall--have a combined retail space of more than 4 million square feet.

A regional shopping mall is defined by marketing and retail experts as a center with one or more full-line department stores. Specialty malls, such as the Old Towne Mall in Torrance, do not qualify as regional malls, according to the definition.

'Saturation Point'

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